State Farm’s CEO made more than $20 million last year – the largest payout he’s gotten since taking the reins at the insurance giant in 2015.
Michael Tipsord, chairman, president and CEO of State Farm, received total compensation of $20,266,505.62 last year, according to a report by The Pantagraph. That includes a $2,147,076.91 base salary and an $18,081,900 incentive-based bonus. It’s a 65% hike from his 2019 compensation.
Tipsord’s incentive pay was “based on our financial results, growth, customer retention and employee engagement for the three years prior to the year or compensation,” company spokesperson Gina Morss-Fischer told The Pantagraph. “For the second year in a row State Farm experienced impressive growth. The company continues to maintain the strong financial performance necessary to keep our promises to our customers and our executive compensation package is designed to reward meeting those growth goals.”
Last year, State Farm posted a net income of $3.6 billion, a 34% decrease from its 2019 net income of $5.6 billion. In 2018, State Farm netted $8.8 billion, according to The Pantagraph.
However, the insurer’s net worth has risen steadily over the last three years, from $100.9 billion in 2018 to $116.2 billion last year. The company said the rise in net worth during the pandemic last year was driven by gains in the stock market.
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Tipsord joined State Farm in 1988 as assistant tax counsel. In 1998, he was named assistant treasurer. He was promoted to vice president and treasurer in 2001, senior vice president in 2002, chief financial officer in 2004 and chief operating officer in 2011.
His 2020 compensation is the highest pay he has received since being named president and CEO in 2015. That year, Tipsord made $7,069,474.03, including a base salary of $1,324,076.94 and a bonus of $5,657,177.38, according to The Pantagraph.
This year’s $20.3 million payout largely places Tipsord in line with his leadership peers in the industry, The Pantagraph reported. Thomas Wilson, chairman, president and CEO of Allstate, pulled in $21,126,386 last year, while Travelers’ chairman and CEO Alan Schnitzer made $18,990,270 and Progressive’s president and CEO Susan Griffith made $15,220,523.